Young Korean households see income decline in 2015

President Park’s worry is no exaggeration it seems. Households headed by those in their 20s and 30s have seen their income dip to negative levels for the first time, which in turn, has led to a drop in consumption. Experts attribute the downturn to rising youth unemployment. Kim Min-ji reports.

Young Koreans may have to tighten their belts. According to Statistics Korea, households led by those aged 39 years or under with two or more family members earned an average of roughly 3,600 U.S. dollars a month in 2015. That’s down 0.6% from a year ago and marks the first yearly drop since relevant data was first complied in 2003. And reflective of their lower income, they are also spending less. Last year, their household spending dipped almost one percent to about 2,800 dollars—the first drop since related records began.

“The ability for households to spend in comparison to their income has fallen. This is because they are responsible for fixed costs, like rent, education fees or phones bills, but their income is not increasing.”

Experts attribute the decrease in income and spending among younger Koreans to rising youth unemployment. Last year, the youth jobless rate hit a record high 9.2 percent. Even for those able to find jobs, they are mainly in the form of temporary work, such as one-year contracts or internships, leaving young workers without much stability.

Experts say it is a vicious cycle as a reduction in income inevitably leads to less consumption and in the long run, if that takes a toll on the country’s economic growth rate—companies will be unwilling to take on more recruits.